Why we experience a series of positive outcomes for a random event and tend to predict that future outcomes will also be positive.

The 

Hot-hand Fallacy

, explained.

What is the Hot-hand Fallacy?

If you flip a coin for long enough, you are bound to have a long streak of heads. When unlikely but possible scenarios occur in the real world, as they inevitably do, people believe that this streak will continue to occur.

Description

This concept, dubbed the hot-hand fallacy, was first introduced by Thomas Gilovich, Amos Tversky and Robert Vallone in their paper “The Hot Hand in Basketball: On the Misperception of Random Sequences” in 1985. In this paper, they expose the underlying mechanisms behind the hot-hand fallacy: confirmation bias (because people are looking for streaks when watching basketball games) and a clustering illusion (people tend to see clusters that occur through a random distribution as being non-random). Over the years, many authors have tried to contradict the existence of this fallacy in sports by arguing that skills and other psychological factors might also be at play.

Example

In a study designed to measure the extent of the fallacy, researchers manipulated a coin toss to make participants think that the person tossing the coin was on a winning streak. The participants predicted that the streak would continue if the same person kept on tossing the coin.